Experiments and Natural Experiments

Fortin econ 560 lecture 1c caveats o the population of

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Unformatted text preview: s of unearned income such as government-provided cash assistance. The lottery: o Massachusetts’s Megabucks lottery during the years 1984 through 1988 o “Winners” has gotten major prizes ranging from $22,000 to $9,696,000, with the sample mean and median equal to $1,104,000 and $635,000 for the purposes of this study are o Prizes that are paid out in yearly installments over 20 years o "Non-winners" sample comes from the population of season ticket holders who have won at least one small, one-time prize, ranging from $100 to $5,000. Labour earnings are from the Social Security earnings records and include accurate earnings records for at least six years preceding and six years following the time of winning, for those who signed the Social Security release forms. VOL.91 NO. 4 IMBENSET AL.: EFFECTS OF UNEARNED NCOME I ," 783 m0 ..... 10- O -6 -4 -2 0 Year Relative to Winning 2 4 6 FIGURE1. AVERAGE ARNINGS ORNONWINNERS, INNERS,AND BIG WINNERS E F W Note: Solid line = nonwinners;dashed line = winners; dotted line = big winners. i On averagethe individuals n ourbasic sample won yearlyprizes of $26,000 (averagedover the Source: Imbens et al. (2001), p. 783 ually decline over the 13 years,starting t around a 70 percentbeforegoing down to 56 percent.Fig- 784 THEAMERICAN CONOMICREVIEW E SEPTEMB co 0.80.6 - 0~ *'0.4 .. 0 -6 -4 -2 0 Year Relative to Winning 2 4 6 FIGURE 2. PROPORTION WITH POSITIVE EARNINGS FOR NONWINNERS, WINNERS, AND BIG WINNERS Note: Solid line = nonwinners;dashed line = winners; dotted line = big winners. Source: Imbens et al (2001), p. 784 type accounts, including IRA's, 401(k) plans, and other retirement-related avings. The secs This likely reflects the differences betwee son ticket holders and single ticket buyers Source: Imbens, Rubin and Sacerdote (2001) 782 THEAMERICAN ECONOMICREVIEW SEPTEMBER 2001 TABLE2-SUMMARY STATISTICS BASIC SAMPLE: PRE-LOrrERYCHARACTERISTICS PosT-LorrERY OUTCOMES AND Variable Mean (SD) Nonwinners (N= 259) Mean Yearly prize Year won Tickets bought Age Age > 55 Age > 65 Male Years of schooling College Working then Earningsyear -6 Earningsyear -5 Earningsyear -4 Earningsyear -3 Earningsyear -2 Earningsyear -1 Earningsyear 0 Earningsyear 1 Earningsyear 2 Earningsyear 3 Earningsyear 4 Earningsyear 5 Earningsyear 6 Positive earnings year -6 Positive earnings year -5 Positive earningsyear -4 Positive earnings year -3 Positive earnings year -2 Positive earningsyear -1 Positive earnings year 0 Positive earningsyear 1 Positive earnings year 2 Positive earnings year 3 Positive earnings year 4 Positive earnings year 5 Positive earnings year 6 Car value Net car value Housing value Net housing value Retirementaccounts Other financial assets Total financial assets 26.4 1986.2 3.3 50.2 0.35 0.15 0.63 13.7 0.65 0.78 13.8 14.1 14.2 14.8 15.6 16.3 16.1 15.4 14.7 14.2 13.8 13.6 13.2 0.69 0.71 0.71 0.70 0.71 0.71 0.71 0.68 0.63 0.60 0.58 0.59 0.56 18.2 15.5 166.3 122.1 64.7 84.3 133.4 (50.8) (1.2) (2.9) (13.7) (0.48) (0.36) (0.48) (2.2) (0.48) (0.41) (13.4) (13.8)...
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